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Musk is more Andrew Carnegie than Nikola Tesla.

What must the world look like to Elon Musk when he wakes up every morning? Does he pull his curtains back, look out the window and see a world of Isaac Asimov flying cars, with Robert Heinlein rockets headed to Mars, and Arthur C. Clarke artificial intelligence menaces?

Musk’s sci-fi visions are a large part of his mystique. His latest Tony Stark-esque conception came in a tweet last month:

Just received verbal govt approval for The Boring Company to build an underground NY-Phil-Balt-DC Hyperloop. NY-DC in 29 mins.

New York to Washington in 29 minutes certainly would be a game changer, but there’s something more pedestrian going on here, too. Musk likes to portray himself as an engineer and a dreamer—that’s what underlies the Hyperloop talk—but his real business play is taking on the exorbitantly high cost of infrastructure in the US.

Consider: New York City’s newest subway line, the Second Avenue extension in Manhattan, hums along underground at 15.4 miles per hour, or about 22.6 feet a second. And in each second of your luxurious $2.50 ride under the Big Apple, you cruise past $518,160-worth of tunnel.

That’s not a typo. Each one of the two miles of extension cost an astounding $2.73 billion. Tunnels are never cheap, but per mile the new subway line is the most expensive in the world. For comparison, digging all the way across the English Channel, a full 23.5 miles, cost around $30 billion in today’s dollars, or $1.3 billion per pile. Madrid managed to complete a subway expansion in 1999-2003 for a mere $104 million a mile (although it was not all underground).

The Boring Company arrived in April, launching with a video announcement on YouTube. The short clip showed a car (a Tesla, of course) darting through Los Angeles traffic, only to pull into what looks like an oversized window-washing cart, which is then sucked into an underground tunnel, and whisked to its final destination, unimpeded by gas-consuming dinosaurs.

Musk’s electric sleds are the vision part of his transportation-business plan—something that looks like a "Jetson's"-level technological advance and would probably blow away a potential investor. But the real engine of this project, the place where Musk can actually make a ton of money, is in figuring out how to reduce the bloated cost of digging a tunnel in the U.S. If someone could figure out how to dig a tunnel in the US at the same cost they can do it anywhere else in the world, they’d make a fortune, and win contracts for any tunnel project in the country.

This is the exact type of market inefficiency that investors and hedge fund operators look for. If, for example, investors notice that oil costs 10 times more in Canada than anywhere else in the world, they’ll see it as a safe bet that oil there is overpriced, and will fall in the long run. But most of those bets are just that—a gamble on something outside investors’ control. It’s rare to have the gravitas and resources to actually change how a market or an industry works, like actually repricing the oil in Canada. And that’s what Musk hopes to do to tunnel digging in the U.S.

But to be successful, Musk doesn’t have to do any of that. He merely has to avoid what is actually causing the exorbitant costs in the U.S. market: a combination of how few drilling companies there are in America, the inefficiencies of governments (the only real buyers when it comes to tunnels), expensive union contracts, and onerous governmental regulations.

Musk has already done this once, to massive success.

Rocketing out of inefficiency

Musk has said that SpaceX, his rocket company, was born when he was personally exploring how to send a miniature greenhouse to Mars on his own dime and found it prohibitively expensive. It would be cheaper, he decided, to build his own rocket. There’s no reason to doubt that’s part of the story, and there is real innovation now coming out of SpaceX; they had to build their own engines and rockets and there’s the promise that their larger and reusable rockets will greatly reduce the cost of getting something to orbit.

But for now, that’s just the jazz hands over top the real footwork.

Musk actually found millions of dollars in value in breaking into the U.S. spy-satellite business and overturning a massive market inefficiency: For almost a decade there was only one U.S. company in the military-rocket game, a joint venture between Lockheed Martin and Boeing called United Launch Alliance. Every top-secret government project had to use United Launch Alliance because it was the only company with top-secret clearance. As might be expected when there’s only one bidder on must-do government projects, the cost for the U.S. to launch top-secret satellites has for years been higher than it was for the rest of the world.

Then SpaceX entered the market, and after a decade of being the only ride in town, United Launch Alliance began to falter. It struggled to match SpaceX’s prices for military contracts, and even dropped out of some bids. SpaceX delivers other payloads too, of course, but government contracts are the largest share of their business. It’s a classic tale of what happens to a monopoly when it meets a freer market—and a story in which SpaceX is poised to reap millions.

A backroad to auto success

Musk’s biggest bet, Tesla, also seems like a play against market stagnation, although in this case not necessarily the type that can be pinned on government. In 2003—the year Tesla launched—the American auto industry was the envy of the industrial world. But it was also bloated and stale, managing old factories and organized labor. Back in 2003, GM, which would require a bailout in 2008, was still making money, but its pension costs were about to balloon, to around between $900 and $1,300 per car in 2012. And, aside from tinkering in the early 1990s, the auto industry largely ignored electric.

Musk saw an untapped niche in electric cars, a cool technology that Detroit wasn’t limber enough to pivot into. Aside from some glorified golf carts, the hybrid-electric car history started with the Tesla Roadster in 2008. Since, Tesla has had a long run virtually unopposed in building electric cars, factories and charging networks. (Although, as Ford and GM have shown recently, old-auto may be catching up in the electric game. A big battleship may take a while to turn, but when it does, look out.)

Recently, a video of Musk surfaced and made the internet rounds. It shows him taking delivery of a McLaren F1 that cost $800,000 in 1999, his present to himself for selling his first venture, Zip2. Musk is happy about his new car, but what he’s really excited about is his next venture: X.com, a finance company that later merged with PayPal. Listening to Musk, you hear hints that in 1999 he saw finance as a stale market ready to be disrupted with internet technology. Standing in front of an ATM, he says, “we’re going to transform the traditional banking industry.”

For Musk, the market niche is the true basis of innovation. Yes, patents and inventions follow, but the initial insight is finding an industry that is moving too slow, or is impervious to change, often because government and industry have colluded to make it that way. When it comes to running a business, Musk is more Andrew Carnegie than Nikola Tesla.

A tunnel may seem a strange place to find an internet billionaire or a space magnate. But with billions to spend on equipment and engineers, Musk has the chance to take on another slow-moving eddy in the stream of capitalism. If he could cut the cost of digging a tunnel in the U.S. by even a fraction, using what is working in overseas drilling, he could find himself in control of another market niche.